I was in Seoul, South Korea last week for an innovation workshop. It had nothing to do with coffee, but whilst there I couldn’t fail to notice the huge number of coffee shops.
One figure I saw referenced 75,000 coffee shops in the country, around one for every 700 people. The number of stores has doubled in the last 4 years alone.
In 2022 according to customs data the value of imported coffee exceeded US1bn for the first time ever. Volume was 183,000 tons up a hefty 22% since 2018.
At what point, if ever, will coffee fall out of favour with Koreans?
Coffee’s history in Korea dates back to the 1890s apparently when the Russian ambassador treated King Gojong to a cup. Coffee became synonymous with the West and modernisation. Coffee shops were called dabang (다방, literally ‘tea room’).
These days the dabang have largely been replaced by chains. Starbucks is one of the largest with around 1800 stores and there are a plethora of local competitors. Ediya is one of the largest. Starbucks success has been driven by its tie up with Shinsegae, a leading retail chaebol.
Other banners include Paik’s Coffee, founded by celebrity chef Jong Won Paik*, Caffe Bene and Halff. More foreign brands are entering the market too. In 2023 French chain Terres de Café opened 3 outlets, Berlin’s The Barn also jumped in. Canada’s Tim Hortons now has 4 outlets and claimed initial sales are amongst its highest in the region.
Retail experts say a coffee shop can only survive if the monthly rent is paid off within the first 4 days of sales.
Before I left Korea I took a walk to shoot this video and in some streets I spotted coffee shops that were either closed down or at least not open on the weekends.
All the chains I saw were very Western in style. Is there a possibility that someone will reinvent traditional Dabang to bring a new coffee consumption occasion?
*Interestingly, Paik’s uses ‘dabang’ as part of its website address